Is This A Perilous Moment for VR?

Charlie Fink
4 min readNov 28, 2022


Meta Reality Labs posted a $3.67 billion Q3 operating loss last month, citing slowing sales for the Quest 2. We shall see what happens this Christmas, but the market for consumer VR may be saturated.

The new $1,499 Meta Quest Pro. Meta says it’s primarily for business and power users. Photo: Meta

Sony’s original PlaystationVR quickly sold five million units after its launch in 2016. Then sales slowed to a trickle. It seems every console owner who wanted one, had one. Analysts estimate the take rate among 117M Playstation 4 owners is around ~5%. If the 195 M gamers in the US are the market for the Quest2, then sales of 10 M units are in the same ballpark.

This is not good news for PlaystationVR2, launching in early 2023. According to Bloomberg, Sony expects to sell more two million units the first year, though there are many fewer compatible Playstation 5 consoles. The Pico 4 VR is already hitting headwinds. It’s owned by China–based Bytedance, which owns TikTok, which is dependent on advertising revenue, which is declining due to business conditions. An expensive consumer launch may be put off.

the Microsoft HoloLens is on shaky ground, too, following the departure of inventor Alex Kipman, and the reorg of his team. This month the US Army issued a scathing evaluation of its HoloLens experiment. Jane’s Defense reports the $22 B contract is being renegotiated.

Meta has lost control of the Metaverse story and, with it, the Metaverse’s connection to VR. Until Facebook’s name changed to Meta, only cognoscenti like author and investor Matthew Ball, an admirer of Epic Games’ Tim Sweeny, were talking about the Metaverse. Since then, Ball’s view that the Metaverse is browser-based, and therefore device agnostic, has prevailed. XR devices are “nice to have” in the metaverse. Meta, whose ambitions for VR set off Metaverse mania last year, now finds itself, with all of VR technology, on the outside looking in on a metaverse that looks more like Roblox. Meta is now working to make Horizon Worlds browser based, and not exclusive to its VR devices.

Most worlds in Meta’s Horizon Worlds are sad, empty places. Photo: Meta

At the recent 2022 Meta Connect developers conference, the company announced Quest sales have surpassed ten million units, a threshold number to support third party developers. Meta says that since its launch in 2019, the Quest app store has grossed over $1.5 B. Sounds like a big number, until the console and PC game “Call of Duty: Modern Warfare II” raked in a billion dollars its first two weeks.

Cumulatively, Call of Duty titles have generated $67 Billion Dollars.

Here’s another scary thought. What if better devices don’t create better VR experiences? I bought a Quest Pro and I like it. It’s better than a Quest 2, but not enough to justify the price, because the experience is the same. I used an 8K, better-than-human-eye, industrial headset from Xtal several years ago. It was so heavy they needed to cantilever it. It is spectacular. Dizzying. I almost fell over. It may be too good. But the device is not the experience.

Finally, here’s the anecdotal, personal, observational part of my thesis: a personal focus group consisting of several hundred college students. The University lends students a Quest 2 for the course of the semester if they don’t own one. About one in ten students reports feeling too ill to use it, but the biggest complaint isn’t a complaint. It’s faint praise. VR is great, but not great enough to cause students to shift attention away from other screens. I’ve had a thirty year romance with VR, and most of my software is free (I write about VR in Forbes). But I don’t use it as much as I’d like. I’m engaged with other screens. Reportedly Meta employees have this problem, too, much to the consternation of their managers.

Charlie Brown would be Apple pundits, press, and analysts. Image: Dark Table

Apple continues to be the sword of Damocles hovering over this rapidly evolving technology, at least on the consumer side. While Apple hasn’t revealed much about their Reality One HMD yet, they have crashed the party successfully so many times it’s assumed they can do it again with XR technology. Apple has the potential to sideline the entire Metaverse conversation by introducing a suite of apps so continuously engaging that people’s only reason not to own one is the cost. This is probably magical thinking. The next great thing is around the corner. It always is.

I said in my first book, Metaverse, written in 2017, “XR is going to follow the development pattern of the personal computer, which took 20 years to reach 50% of American households.” I may yet be right. You’d think I’d be happy about that, but the truth is quite the opposite. I want to be wrong, but I also don’t want to be guilty of drinking my own bathwater.

This story originally appeared on on November 24, 2022.



Charlie Fink

Consultant, Columnist, Author, Adjunct, Covering AI, XR, Metaverse for Forbes